Ch. 13

The beginning capital balance shown on a statement of owner's equity is $43,000. Net income for the period is $18,000. The owner withdrew $22,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is A. $39,000. B. $47,000. C. $61,000. D. $83,000

A. $39,000.

At the end of the year Stan Still Stationery Store had the following balances: Sales $580,000; Sales Discounts $2,540; Sales Returns and Allowances $14,820; Sales Salaries Expense $60,000. The Net Sales for the year are: A. $562,640 B. $563,180 C. $577,460 D. $503,180

A. $562,640

Which of the following would not be classified as a Current Asset: A. Equipment B. Supplies C. Accounts Receivable D. Cash

A. Equipment

The current ratio is calculated by A. dividing current assets by current liabilities. B. dividing current liabilities by current assets. C. dividing total assets by total current assets. D. dividing current assets by total assets.

A. dividing current assets by current liabilities.

A total of $8,000 in supplies was purchased during the year. By the end of the year, the company had used up $5,300 of the supplies. The adjusting entry needed at the end of the year is: A. Debit Supplies Expense 8,000 and credit Supplies 8,000 B. Debit Supplies Expense 5,300 and credit Supplies 5,300 C. Debit Supplies 5,300 and credit Supplies Expense 5,300 D. Debit Supplies Expense 2,700 and credit Supplies 2,700

B. Debit Supplies Expense 5,300 and credit Supplies 5,300

Which of the following accounts will appear on the post-closing trial balance? A. Miscellaneous Income B. Payroll Taxes Payable C. Medicare Tax Expense D. Sales

B. Payroll Taxes Payable

Gross profit on sales is calculated by subtracting A. sales returns and allowances from sales. B. cost of goods sold from net sales. C. ending inventory from the total merchandise available for sale. D. total expenses from sales.

B. cost of goods sold from net sales.

For the current fiscal year, Purchases were $166,000, Purchase Returns and Allowances were $3,000 and Freight In was $12,000. If the beginning merchandise inventory was $110,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is: A. $186,000 B. $116,000 C. $210,000 D. $216,000

C. $210,000

Prepaid expenses appear in the A. Operating Expenses section of the income statement. B. Other Expenses section of the income statement. C. Current Assets section of the balance sheet. D. Current Liabilities section of the balance sheet.

C. Current Assets section of the balance sheet.

On Mar. 1, Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount. Select the adjusting entry made on December 31, to record the amount of rent that had expired. A. Debit Prepaid Rent for 15,000 and credit Rent Expense 15,000 B. Debit Prepaid Rent 18,000 and credit Rent Expense 18,000 C. Debit Rent Expense 15,000 and credit Prepaid Rent 15,000 D. Debit Rent Expense 13,500 and credit Prepaid Rent 13,500

C. Debit Rent Expense 15,000 and credit Prepaid Rent 15,000

Which of the following is not a section on a Classified Balance Sheet: A. Current Assets B. Long-Term Liabilities C. Selling Expenses D. Plant and Equipment

C. Selling Expenses

Inventory turnover is calculated by A. adding beginning inventory to ending inventory and dividing by 2. B. dividing average inventory by cost of goods sold. C. dividing cost of goods sold by average inventory. D. dividing average inventory by the ending inventory.

C. dividing cost of goods sold by average inventory.

The balance of the owner's drawing account is A. listed in the Other Expenses section of the income statement. B. listed in the Current Assets section of the balance sheet. C. used in the calculation of ending capital on a statement of owner's equity. D. listed in the Operating Expenses section of the income statement.

C. used in the calculation of ending capital on a statement of owner's equity.

A company reported gross profit of $85,000, total operating expenses of $40,000 and interest income of $2,500. What is the income from operations? A. $47,500 B. $42,500 C. $40,000 D. $45,000

D. $45,000

Which of the following is not a current asset? A. Accounts Receivable B. Prepaid Insurance C. Merchandise Inventory D. Equipment

D. Equipment

Cost of Goods Sold is classified as a(n): A. Revenue account B. Asset account C. Owner's Equity account D. Expense account

D. Expense account